Weathering the Storm

In this country, the vast majority of us are fortunate enough to have reliable access to a food supply that lets us enjoy tropical papayas in the dead of Chicago's frigid winter, or feast on fresh Coho salmon thousands of miles from where it once swam. For most, access to staple items like bottled water or shelf-stable meals is rarely given a second thought.

But it only takes a natural disaster like Hurricane Katrina or the recent Hurricane Sandy to shine a spotlight on the critical importance of an intelligent supply chain in our industry.

Despite pre-storm news photos of empty store shelves, once the winds subsided and access to the affected areas was restored, strategically positioned trucks were at the ready to deliver needed supplies to the storm-ravaged areas. Many grocery retailers were open for business in a matter of days.

Today's intelligent supply chain allows retailers to anticipate and prepare for, rather than react to, shopper behavior to ensure that the right products are in the right place at the right time, no matter what the situation. Tools like predictive analytics (see article, "Finding New Meaning in Data," on p.20) make it possible to accurately and intelligently forecast demand, ensuring that shelves remain stocked.

Even under the best of circumstances, shoppers have little patience for out-of-stocks. In a recent report, the "2012 U.S. Supermarket Experience Study," the Retail Feedback Group found out-of-stocks cost retailers dearly, with 50 percent of shoppers going to another store to purchase the wanted items.

Next issue, we'll dedicate a Special Report to exploring the question, Are you making the most of your supply chain? As you'll see, effective supply chain management is more than just good business; it's both a strategic competitive advantage and a means to earn the invaluable loyalty of your shoppers.